It is not illegal for lawmakers to apply for or accept Paycheck Protection Program money, and every office that responded to a request for comment for this story emphasized that the members had no role in the application process and that the companies or nonprofits took the loans legally in an effort to keep people employed during the pandemic.
But the program’s connections to Congress, the majority of which were previously undisclosed, have raised new questions about the administration’s secrecy of the $670 billion program, as well as potential conflicts of interest as lawmakers prepare to craft the next coronavirus rescue package.
The Paycheck Protection Program has faced transparency complaints and intense scrutiny over charges it was helping the well-connected after reports revealed that large corporations, including Shake Shack and the L.A. Lakers, were among the first to be awarded loans, while smaller businesses were stuck in line. Shake Shack and the sports team later returned the loans.
The Treasury Department and Small Business Administration finally agreed to divulge some loan recipients, but only for borrowers who took loans over $150,000 — a small minority of the program’s total borrowers, as more than 80 percent of the Paycheck Protection Program loans were below that threshold.
In May, Democrats tried to pry free the list of recipients, but their push in the House to require disclosure of at least some companies was blocked on the floor by Republicans — including Kelly, Allen, Hern, Mullin, Williams and Hartzler, who all voted against the bill.
Among the Paycheck Protection Program loan recipients with connections to members of Congress were “Mike Kelly Automotive Group, Inc.”; “Mike Kelly Automotive, LP” and “Mike, Kelly Hyundai, Inc.,” which each received loans for $150,000-$350,000 from PNC Bank. Kelly spokesperson Andrew Eisenberger said the lawmaker was not involved in the day-to-day operations of his dealerships and was not part of the discussions with the lender.
“The Paycheck Protection Program was designed to sustain the income of workers who would otherwise have been without pay or employment at no fault of their own during the coronavirus pandemic, and organizations in which members of Congress have an ownership stake were not prohibited from receiving PPP loans to help their employees during this difficult time,” Eisenberger said.
R.W. Allen Construction received a loan in the range of $350,000 and $1 million. Allen founded the construction company, but relinquished his majority stake before he came to Congress and no longer holds any decision-making authority, according to his office. A website for the company lists his wife, Robin, as the chairman of the business.
“I can confirm our office has consulted with the U.S. House of Representatives Office of General Counsel and is confident the company, like businesses around the country impacted by COVID-19, is eligible to receive a loan under the Paycheck Protection Program after doing their due diligence and applying in good faith,” said Andrea Porwoll, communications director for Allen.
KTAK Corporation, owned by Hern, the Oklahoma Republican, received between $1 and 2 million. The company owns McDonald’s numerous franchises in the Tulsa area. The company owns numerous McDonald’s franchises in the Tulsa area.
In a statement, Hern’s chief of staff Cameron Foster said that Hern is not involved in the day to day operations of the business, and that the loan allowed it to keep all its employees at their current level of employment. “Kevin Hern has been open and transparent with members of the community about his family business’ need of a Paycheck Protection Program Loan during the COVID-19 crisis,” Foster said.
Four companies owned by Mullin — Mullin Plumbing Inc., Mullin Environmental, Mullin Plumbing West, and Mullin Services — took a total of somewhere between $800,000 and $2 million in Paycheck Protection Program money. His office did not immediately respond to a request for comment, but his most recent financial disclosure form shows the businesses listed as assets; Mullin’s wife also took a salary from Mullin Plumbing Inc.
Munley Law, a Scranton, Pennsylvania law firm, received between $350,000 and $1 million in funds from the Paycheck Protection Program. The firm is closely tied to Cartwright. Cartwright worked there for 25 years before being elected and his wife Marion Munley is a partner there. It was founded by her father Robert, who died in December.
Cartwright still has pension assets being held in the firm’s profit sharing plan, a spokesperson for Munley Law told POLITICO last year.
The connection has been scrutinized by conservative groups in the past, who alleged that Cartwright would benefit from a bill he sponsored to raise the minimum liability insurance level for truckers. The firm specializes in trucking and auto litigation.
Both the firm and Cartwright’s office said that he did not assist Munley with obtaining the loan, and a spokesperson for Cartwright noted that he voted for a House bill promoting transparency for the Paycheck Protection Program loans.
Other lawmakers have family members who work for companies that, at some point, reaped benefits from the small business loans program. Rep. Susie Lee’s (D-Nev.) husband is the CEO of a regional casino developer, Full House Resorts, which took a $5.6 million Paycheck Protection Program loan. And Rep. Debbie Mucarsel-Powell’s (D-Fla.) spouse is an executive at a restaurant chain, Fiesta Restaurant Group, which received $15 million in aid before returning the loan in full. Both lawmakers also voted for the transparency bill.
The Congressional Black Caucus Foundation, which is associated with the CBC, said it received a Paycheck Protection Program loan to “support its continuity of operations” during the coronavirus crisis.
“Without this assistance, the CBCF would have faced a 30% reduction in the overall organizational budget impacting more than 25 employees,” the organization said in a statement. “In addition, the CBCF provides paid, need-based fellowship and internship opportunities to equip future leaders and increase diversity on Capitol Hill. These young professionals would not otherwise have the invaluable opportunity for inclusion in the pipeline of public service.”